The academic bubble is ready to burst, while the academics in their infinite wisdom tell us that they know the best way to run our society and civilization – don’t you find that strange? It looks like they haven’t got their own house in order, however, they want our entire country to run like a giant university campus – really interesting. Those same academics want to tell us how to vote, how to redistribute wealth, how to think — well, I guess their day of reckoning is just around the corner — and I’m afraid what’s to come won’t be pretty. No, I don’t want to be the one to say; “I told you so.” Sure, there are others with more social media followers who see the reality of the situation to post that slap in the face when the time comes. Well, let’s talk, shall we?
40% of student loans are in technical default (90 days in the back with no other agreement to make up payments). That’s $583 billion in non-performing loans that we may never see repaid. Trust me when I tell you the college loan bubble has burst and it’s a severe crisis. Why is this allowed to continue? Well, if it stops, academia will collapse, become a huge problem for our federal government, add more than 1/2 trillion to our $20 trillion national debt, and cause millennials to worry about who the Democrats all promised “free college for all” during the presidential election for the year 2016.
However, by the time the election is over, student loan debt will be $1.57 trillion, although official figures claim it is only $1.2 trillion which is the actual number before the start of the 2015 school year.
If you don’t see the enormity of the problem, let’s talk about the auto industry now. It turns out that the number of defaults on “mortgage” car loans is at an all-time high of 4.5% – non-prime loans mean loans given to those with no proof of ability to pay or marginal credit ratings, possibly coming from borrowers of lower socio-economic status low. Last time this happened, the auto industry was broke and needed a big bailout, and we’re hitting those same numbers now – realizing that it’s only 4.5% and not 40-50% like the student loan problem.
Still afraid? Well, it’s Halloween 2016 today, so am I, and no, there won’t be any good witches flying around on their brooms to win the next election to use bluffing to remove this problem – in fact, both presidential candidates are likely to see the car loan problem get worse, plus Student loan debt problem – not to mention our stock market broke all-time highs with PE ratios and major stock market index records.